Welfare Effects of Price Discrimination by a Regulated Monopolist

1991 ◽  
Vol 22 (4) ◽  
pp. 571 ◽  
Author(s):  
Mark Armstrong ◽  
John Vickers
Keyword(s):  
Price Discrimination ◽  
Welfare Effects

Consumer surplus bias and the welfare effects of price discrimination

2019 ◽  
Vol 55 (1) ◽  
pp. 33-45
Author(s):  
Francisco Galera ◽  
Pedro Garcia-del-Barrio ◽  
Pedro Mendi
Keyword(s):  
Price Discrimination ◽  
Consumer Surplus ◽  
Welfare Effects

scholarly journals On the Economics of the “Meeting Competition Defense” Under the Robinson–Patman Act

2016 ◽  
Vol 16 (3) ◽  
pp. 1213-1238 ◽  
Author(s):  
Iñaki Aguirre
Keyword(s):  
Social Welfare ◽  
Price Discrimination ◽  
Welfare Effects ◽  
Competitive Pressure ◽  
Economic Aspects ◽  
Equilibrium Models ◽  
Final Good ◽  
Good Market ◽  
Goods Market ◽  
Secondary Line

Abstract This paper studies the welfare effects of third-degree price discrimination when competitive pressure varies across markets. In particular, we study the economic aspects of the Robinson–Patman Act associated with the “meeting competition defense.” Using equilibrium models, the main result we find is that this defense might be used successfully in cases of primary line injury precisely when it should not be used, namely when price discrimination reduces social welfare. This result obtains both when discrimination appears in the final good market and when it is used in the intermediate goods market. We also find that these results may maintain under secondary line injury.

scholarly journals Zone Pricing in Retail Oligopoly

2019 ◽  
Vol 11 (1) ◽  
pp. 124-156 ◽  
Author(s):  
Brian Adams ◽  
Kevin R. Williams
Keyword(s):  
Market Power ◽  
Price Discrimination ◽  
Consumer Surplus ◽  
Welfare Effects ◽  
Rural Markets ◽  
Home Improvement ◽  
Home Depot ◽  
Zone Pricing

We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home-improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe’s would prefer coarser pricing. Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in rural markets, where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer price discrimination does. (JEL D43, L13, L81, M31, R32)

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